Drug Companies Increase Lobbying by 25%, Contribute Heavily to Schwarzenegger as Legislature Debates Reform

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In response to a wave of prescription drug cost-saving proposals, state, national and international pharmaceutical companies have dramatically increased their lobbying activities in California, contributed $325,000 to Governor Schwarzenegger and funded phony grassroots groups to use as political cover, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

As drug prices continue to push the cost of health care beyond the means of a record number of working families, 42 state legislatures are considering 330 proposals — including19 in California. Among the most promising are proposals to reduce the cost of drugs by reimporting U.S. made prescriptions from Canada and to allow state governments to negotiate bulk discounts of 30-60% off drug prices like the Canadian government and some federal agencies currently do.

Pharmaceutical companies, whose profits are 4 to 5 times that of the average Fortune 500 companies, have fought back:

** In California, pharmaceutical companies and lobbying associations spent 25% more lobbying the legislature in the first three months of 2004 compared to the same period in 2003.

** In California, eight companies — Allergan, Amgen, AstraZeneca Bayer, Bristol Meyers Squibb, Eli Lilly, GlaxoSmithKline, and Pfizer — contributed $550,000 to legislators and political parties since the beginning of 2003.

** Pharmaceutical companies successfully won a ban on drug reimportation and bulk purchasing in the recently approved federal Medicare prescription drug law and have contributed $7 million to members of Congress for the November elections: 67% to Republicans, 33% to Democrats.

“To say that the drug companies have greased the legislature would be an understatement,” said Jerry Flanagan of FTCR. “Whether or not Governor Schwarzenegger supports prescription drug reform will be a litmus test of his commitment to stand-up to special interest groups.”

Drug Companies Fund Phony Organizations

Pharmaceutical companies have also funded several health care and advocacy groups in California including the California Latino Medical Association which is opposing legislation to provide the safe reimportation of prescription drugs. According to the Association’s website, their “generous sponsors” include: Pfizer, Aventis, Roche, Johnson & Johnson and GlaxoSmithKline

Another group, 60 Plus Association, which receives funding from pharmaceutical companies and has lobbied Congress purportedly representing seniors for several years, is also opposing safe reimportation of prescription drugs (SB 1149).

According to quarterly reports filed with the California Secretary of State, 16 pharmaceutical companies and trade associations spent $1.08 million in lobbying expenses between January 1 and March 30. Lobbying expenses include salaries for in-house lobbyists and the cost of hiring outside lobbying firms. Gifts and contributions to lawmakers are not included in these totals. The companies spent $828,338 during the same period in 2003. To view drug company lobbying data visit:

The 16 pharmaceutical companies and trade associations whose lobbying expenditures were tracked in the study are opposing legislative proposals designed to provide lower cost prescriptions, including:

AB 1957 (Frommer, D-Los Angeles)

Requires the Department of Health Services (DHS) to establish a web site that will facilitate the safe purchase by California residents of prescription drugs from Canadian pharmacies. Additionally, this bill requires the Department of General Services (DGS) to coordinate a review of departments and agencies that purchase prescription drugs to determine which state programs may save significant state funds by purchasing from Canadian sources.

AB 1958 (Frommer, D-Los Angeles)

Allows small business owners and uninsured patients to receive the same prescription drug discounts that the Governor, legislators and state employees currently receive by authorizing the California Public Employees’ Retirement System (CalPERS) to form a purchasing pool for prescription drugs for public and private purchasers.

AB 1959 (Chu, D-Monterey Park)

Requires the State Auditor to conduct an audit of the state’s procurement and reimbursement practices as they relate to the purchase of drugs for or by state agencies.

AB 1960 (Pavley, D-Agoura Hills)

Requires pharmacy benefits managers (PBMs) to register with the Board of Pharmacy (Board), requires the Board to set specified standards for registration, and requires PBMs to make specified disclosures to purchasers and prospective purchasers with regard to drug rebates, revenues and its drug formularies, and to make specified disclosures to the public upon request. Additionally, this bill would establish requirements regarding PBM contracts and the provision of certain drugs.

SB 1144 (Burton, D-Sacramento)

Requires the Department of General Services (DGS) to include Canadian sources among the suppliers and manufacturers of single source or multisource drugs, with whom DGS is authorized to enter into exclusive or nonexclusive contracts on a bid or negotiated basis. In addition, this bill requires DGS to seek appropriate federal waivers as necessary to comply with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

SB 1149 (Ortiz, D-Sacramento)

Requires the Board of Pharmacy to develop and disseminate information identifying pharmacies in Canada that meet recognized standards for the safe acquisition, shipment, handling and dispensing of dangerous drugs to persons in California. This bill also requires the Board to collect, publish, and post on the internet information concerning suppliers of dangerous drugs that are located outside the United States, and have violated safe shipping, handling and processing standards.

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The Foundation fro Taxpayer and Consumer Rights is a non-profit and non-partisan consumer advocacy group. For more information, please visit us on the web at or

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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